<PAGE>

                                                                    EXHIBIT 10.5


THIS LEASE IS A NEW TENANCY FOR THE PURPOSES OF THE LANDLORD AND TENANT
(COVENANTS) ACT 1995


                          DATED          24 JULY 2000
             -----------------------------------------------------


                              LAND SECURITIES PLC

                                     -and-

                                eTOYS UNLIMITED


             -----------------------------------------------------

                                     LEASE

                                  relating to
                               Premises known as
             Sixth and Seventh Floors, St Albans House, Haymarket,
                                  London SWI

             -----------------------------------------------------




                               Nabarro Nathanson
                                  Lacon House
                                Theobald's Road
                                London WCIX 8RW

                               Tel: 020 7524 6000




             -----------------------------------------------------

<PAGE>

                                   CONTENTS


<TABLE>
<CAPTION>

CLAUSE    SUBJECT MATTER                                          PAGE
------    --------------                                          ----
<S>       <C>                                                     <C>
1.        DEFINITIONS................................................1

2.        INTERPRETATION.............................................3

3.        DEMISE, TERM AND RENT......................................4

4.        TENANT'S COVENANTS.........................................5
          To pay rents...............................................5
          To pay outgoings...........................................5
          Service Charge.............................................5
          Comply with Acts...........................................5
          Repair.....................................................5
          Window Cleaning............................................6
          Decoration.................................................6
          To permit the Landlord to repair in default................6
          Alterations................................................6
          Signs and advertisements...................................7
          Overloading................................................7
          User.......................................................7
          Restrictions on User.......................................7
          Alienation.................................................8
          Registration..............................................10
          To permit viewing.........................................10
          To inform the Landlord of notices.........................10
          Reimburse fees incurred by Landlord.......................10
          The Planning Acts.........................................10
          Encroachment and easements................................11
          Indemnity.................................................11
          To pay charges............................................11
          Interest on overdue payments..............................11
          VAT.......................................................11
          Management: Common Parts..................................11
          Superior Interests........................................12

5.        LANDLORD'S COVENANTS......................................12
          Quiet enjoyment...........................................12
          To insure.................................................12
          To provide services.......................................12

</TABLE>


                                       i

<PAGE>

                 Signage......................................................12
                 Headlease....................................................13

6                AGREEMENTS...................................................13
                 Re-entry.....................................................13
                 Cesser of rent...............................................13
                 No easements.................................................14
                 Service of notices...........................................14
                 Superior Landlord's and Mortgage's Consent...................14
                 Tenant's option to determine.................................14
                 Contracts (Rights of Third Parties) Act 1999.................14

THE FIRST SCHEDULE   PART I - Description of Demised Premises.................15
                     PART II - Easements and Rights Granted...................16
                     PART III - Easements and Rights Reserved.................16

THE SECOND SCHEDULE  Rent Review..............................................18

THE THIRD SCHEDULE   Services and Service Charges.............................20
                     PART I - Administrative Provisions.......................20
                     PART II - Landlords Obligations..........................20
                     PART III - Services......................................21


                                       11
<PAGE>

                                   PARTICULARS

LANDLORD:                              Land Securities Plc

Registered Office:                     5 Strand, London WC2N 5AF

Company Number:                        551402

TENANT:                                eToys UK Limited

Registered Office:                     50 Victoria Embankment Blackfriars London
                                       ECAY ODY

Company Number:                        03726048

DEMISED PREMISES:                      Sixth and Seventh Floors, St Albans House

BUILDING:                              St. Albans House, Haymarket, London SW1

TERM COMMENCEMENT DATE:                25 December 1999

LENGTH OF TERM:                        Fifteen years

Tenant's Break clause:                 25 December 2009

Expiration Date:                       24 December 2014

INITIAL RENT:                          Three hundred and ninety two thousand
                                       five hundred and eighty pounds (L392,580)
                                       (exclusive of VAT)

RENT COMMENCEMENT DATE:                24          2000

RENT REVIEW DATES:                     25 December 2004 and 25 December 2009

There is no agreement for lease to which this lease gives effect




<PAGE>

THIS LEASE made the      day of       Two thousand


PARTIES

(1) The Landlord named in the Particulars (the "LANDLORD").

(2) The Tenant named in the Particulars (the "TENANT").

WITNESSES AS FOLLOWS:


1.  DEFINITIONS

    In this Lease, unless the context requires otherwise:

    "ACT"

              means any Act of Parliament (including any consolidation,
              amendment or reenactment of it) and any subordinate legislation,
              regulation, or bye-law made under it;

    "THE BUILDING"

              means the Building and its curtilage (and each and every part of
              it) known as St. Albans House, Haymarket, London SW1 as registered
              at HM Land Registry under Title Number NGL 604865, with all
              Landlord's plant and machinery in it;

    "THE COMMON PARTS"

              means the structure, exterior, roof and foundations of the
              Building and all lavatories, fire escapes, pavements (if any),
              entrances, lobbies, passages, lifts, staircases, plant,
              equipment and other features and facilities (both functional and
              decorative) not demised exclusively to any tenant and either
              available for use by the Tenant in common with others and/or
              used by the Landlord in connection with the Services;

    "CONDUCTING MEDIA"

              means gutters, pipes, wires, cables, sewers, ducts, drains,
              mains, channels, conduits, flues and any other medium for the
              transmission of Supplies;

    "THE DEMISED PREMISES"

              means the premises (and each and every part of them) described
              in part 1 of the First Schedule;

                                      1

<PAGE>


    "THE INSURED RISKS"

              means such of the risks of fire (including lightning),
              explosion, storm, tempest, earthquake, flood, bursting or
              overflowing of water tanks apparatus or pipes, impact and (in
              peacetime) aircraft and any articles dropped from aircraft,
              riot, civil commotion, and malicious damage for which cover at
              the time the insurance is effected is generally available on
              normal commercial terms, and such other risks against which the
              Landlord from time to time reasonably insures;

    "THIS LEASE"

              means this deed (whether it be a Lease or an Underlease) and
              any licence deed or other document supplemental to it;

    "THE PLANS"

              means the plans annexed to this Lease;

    "QUARTER DAYS"

              means 25 March 24 June 29 September and 25 December in every
              year and Quarter Day means any of them;

    "THE SERVICES"

              means the works, services, facilities and charges listed in
              part III of the Third Schedule;

    "THE SERVICE CHARGE"

              means a sum representing a fair and proper proportion of the
              costs (including provision towards the estimated cost of the
              future renewal or replacement at the appropriate time of the
              Landlord's plant and machinery and of the periodical cleaning
              and future repair, renewal and redecoration of the Building)
              incurred by the Landlord in providing the Services;

    "SUPPLIES"

              means water, steam, gas, air, soil, electricity, telephone,
              heating, telecommunications, data communications and other
              like supplies;

    "THE TERM"

              means the term of years granted by this Lease (including where
              applicable any extension of such term under any Act or
              otherwise);

    "THE TERMINATION DATE"

              means the expiration date of the Term (however arising);

    "VAT"

              means Value Added Tax or any similar tax from time to time
              replacing it or performing a similar fiscal function;

                                       2


<PAGE>>

[BLUEPRINT]

LAND SECURITIES
5 STRAND
LONDON
WC2N 5AF
0171 413 9000

DEMISE DETAILS
SIXTH FLOOR
57 - 60 HAYMARKET
LONDON
SW1
LEASE REF: 00000000

PROPERTY DETAILS
SIXTH FLOOR
ST. ALBANS HOUSE
57 - 60 HAYMARKET
LONDON SW1
4857-6





<PAGE>

[BLUEPRINT]

LAND SECURITIES
5 STRAND
LONDON
WC2N 5AF
0171 413 9000

DEMISE DETAILS
SEVENTH FLOOR
57 - 60 HAYMARKET
LONDON
SW1
LEASE REF: 00000000

PROPERTY DETAILS
SEVENTH FLOOR
ST. ALBANS HOUSE
57 - 60 HAYMARKET
LONDON      SW1
4857-6



<PAGE>


   "VAT SUPPLY"
            has the meaning which "supply" has for the purpose of the Value
            Added Tax Act 1994.


2.   INTERPRETATION

     In this Lease:

2.1    The clause headings shall not affect its construction.

2.2    Words respectively denoting the singular include the plural and vice
       versa and one gender include each and all genders.

2.3    Obligations owed by or to more than one person are owed by or to them
       jointly and severally.

2.4    "THE LANDLORD" includes the person entitled to the reversion expectant
       on this Lease; and "THE TENANT" includes the successors in title and
       persons deriving title under the original Tenant, and "THE LANDLORD'S
       SURVEYOR" may be an employee of the Landlord or of an associated
       company of the Landlord.

2.5    An obligation not to do or omit to do something includes an obligation
       not to suffer or permit the doing or omission (as appropriate) of that
       thing.

2.6    A reference to an act or omission of the Tenant includes reference to
       an act or omission of any person having the Tenant's express or implied
       authority.

2.7    Any sums payable by reference to a year or any other period shall be
       payable proportionately for any fraction of a year or other period (as
       appropriate). Apportionments of rents will be computed using the
       method set out at paragraphs K2.6.4 - K2.6.6 of the Law Society's
       Conveyancing Handbook 1999. If apportionment on that basis is
       impossible, the method set out in paragraph K2.6.8 of the above
       Handbook will be used.

2.8    All sums payable under this Lease must be paid at the discretion of
       the Tenant by direct debit or in sterling through (or by cheque drawn
       on) a clearing bank in the United Kingdom.

2.9    Reference to a fair proportion of a sum is reference to such fair and
       reasonable proportion of that sum as determined by the Landlord's
       surveyor acting reasonably and properly (whose decision except in case
       of manifest error will be binding on the parties).

2.10   Rights of entry reserved to the Landlord (whether under clause 4 or
       under part III of the First Schedule) may also be exercised by those
       authorised by the Landlord (and with plant and equipment where
       appropriate) but entry shall (save in emergency or in case of default
       by the Tenant) only be exercised pursuant to 48 hours' prior notice;
       and as little inconvenience and disturbance as reasonably practicable
       shall be caused; and all damage caused to the Demised Premises shall
       as soon as possible be made good.



                                      3


<PAGE>


3.   DEMISE, TERM AND RENT

3.1    The Landlord demises to the Tenant the Demised Premises TOGETHER with
       the rights specified in part II of the First Schedule EXCEPT AND
       RESERVING to the Landlord the Superior Landlord and those authorised
       by it the rights specified in part III of the First Schedule TO HOLD
       for a term of FIFTEEN YEARS (subject to determination as hereinafter
       provided) commencing on the 25 day of December One thousand nine
       hundred and ninety nine and expiring on the 24 day of December Two
       thousand and fourteen.

3.2    The Tenant shall pay the following sums, which are reserved as rent:

3.2.1    FIRSTLY, during the first five years of the Term, yearly, the rent
         of Three hundred and ninety two thousand five hundred and eighty
         pounds (L392,580) and during the remainder of the Term the rent
         determined in accordance with the provisions of the Second Schedule.
         Such rent shall be payable by equal quarterly payments in advance
         on the Quarter Days in every year without any deduction or set off.
         The first payment shall be for the period commencing on (and to be
         paid on) the 24 day of July Two thousand and ending on the day prior
         to the Quarter Day next following that date PROVIDED THAT during the
         period of twelve months from 24 July 2000 and expiring on 23 July 2001
         the yearly rent shall be abated each quarter by the sum of Thirty
         two thousand seven hundred and fifteen pounds (L32,715) and the
         quarterly payments in advance shall be adjusted accordingly during
         such period such that the quarterly rent for such period shall be
         payable at the rate of Sixty five thousand four hundred and thirty
         pounds (L65,430) (exclusive of VAT) AND PROVIDED FURTHER THAT during
         the period 24 July 2001 and expiring on 23 July 2002 the yearly rent
         shall be abated each quarter by the sum of Sixteen thousand three
         hundred and fifty seven pounds and fifty pence (L16,357.50) and the
         quarterly payments in advance shall be adjusted accordingly during
         such period such that the quarterly rent for such period shall be
         payable at the rate of Eighty one thousand seven hundred and eighty
         seven pounds and fifty pence (L81,787.50) (exclusive of VAT);

3.2.2    SECONDLY a fair proportion of the sums paid by the Landlord in
         insuring the Building under clause 5.2.1 and the whole of the sums
         paid for insuring three years, rents firstly and thirdly reserved by
         this Lease. Such rent shall be payable within 7 days of demand;

3.2.3    THIRDLY the sums due under clause 4.3, payable as specified in
         part I of Third Schedule;

3.2.4    FOURTHLY, any sums due under clause 4.2.3;

3.2.5    FIFTHLY the sums due under clause 4.24 (so far as they relate to the
         rents above reserved).



                                      4


<PAGE>


4.    TENANT'S COVENANTS

      THE Tenant COVENANTS with the Landlord at all times during the Term:

4.1   TO PAY RENTS

      To pay the rents reserved by this Lease immediately they become due
      without deduction or set off.

4.2   TO PAY OUTGOINGS

      To pay all rates, taxes, duties, charges, assessments, impositions and
      outgoings ("levies") whatsoever whether parliamentary, local or
      otherwise charged upon the Demised Premises or upon their owner or
      occupier and a fair proportion of any levies on the Landlord in respect
      of the Building (except income tax on the rents reserved properly
      payable by the Landlord and any levy occasioned by any dealing with the
      reversion immediately expectant on this Lease).

4.3   SERVICE CHARGE

      To pay the Service Charge, in accordance with part I of the Third
      Schedule provided always that in no circumstances shall the Tenant pay
      any Service Charge in relation to any lettable parts of the Building
      which are at any time underlet.

4.4   COMPLY WITH ACTS

      To comply with all notices served by any public, local or statutory
      authority and with the requirements of any present or future Acts,
      regulation or directive (whether imposed on the owner or occupier)
      which affects the Demised Premises or their use Provided always that
      any such matter served or imposed on the owner as relates to the
      Demised Premises or their use shall be notified forthwith to the Tenant.

4.5   REPAIR

4.5.1    To keep the Demised Premises including without limitation all
         Landlord's plant and machinery in it in good and substantial repair
         and good working order and to keep any car parking spaces used by
         the Tenant clean tidy and free of obstruction or rubbish.

4.5.2    To replace by new articles of similar kind and quality any fixtures,
         fittings, plant, or equipment (other than Tenant or Trade fixtures
         and fittings) upon the Demised Premises which are in need of
         replacement.

4.5.3    Damage by any of the Insured Risks is excepted from the Tenant's
         obligation under sub-clauses 4.5.1 and 4.5.2 save to the extent that
         payment of the whole or part of the insurance moneys is refused in
         consequence of some act or default of or suffered by the Tenant.

4.5.4    As the Termination Date to yield up the Demised Premises (having
         removed all Tenant's and Trade fixtures and any partitions installed
         by the Tenant, reinstated any partitions or other fixtures shown on
         the Plan but removed by the Tenant during the Term, as the Landlord
         shall reasonably direct, and made good all damage caused in



                                      5


<PAGE>


         such removal and reinstatement to the Landlord's reasonable
         satisfaction) in the state of repair and working order above
         referred to.

4.5.5    Promptly to notify the Landlord as soon as the Tenant becomes aware
         of any defect in the Demised Premises or defect or want of repair in
         the Building capable of giving rise to a duty under any Act or under
         this Lease on the Landlord.

4.6   WINDOW CLEANING

      To clean all windows and their frames, both inside and outside, of the
      Demised Premises as often as reasonably necessary.

4.7   DECORATION

      During the year Two thousand and eight, and in the year immediately
      before the Termination Date appropriately to decorate the Demised
      Premises in a proper and workmanlike manner, to the reasonable
      satisfaction of the Landlord, and in the case of works carried out in
      the year immediately before the Termination Date, to the approval of
      the Landlord as to colour and appearance (such approval not to be
      unreasonably withheld or delayed).

4.8   TO PERMIT THE LANDLORD IN REPAIR TO DEFAULT

      To permit the Landlord (and in accordance with the provisions of
      clause 2.10) to enter and view the condition of the Demised Premises.
      If the Landlord serves on the Tenant or leaves on the Demised Premises
      notice in writing requiring that any repairs or other works or matters
      for which the Tenant is liable under the terms of this Lease be
      undertaken, and the Tenant does not within two months following such
      notice (or sooner if requisite) commence to comply with its requirements
      and thereafter diligently proceed with the same to the reasonable
      satisfaction of the Landlord and/or the Landlord's Surveyor the Landlord
      may enter the Demised Premises and do everything necessary to comply
      with such notice. All costs properly incurred by the Landlord in so
      doing shall be repaid by the Tenant as a debt within seven days of
      demand. Any such entry is without prejudice to the Landlord's rights
      under clause 6.1.

4.9   ALTERATIONS

4.9.1    Not to make any structural or external alteration or addition in or
         to the Demised Premises or cut into any structural part of the
         Building.

4.9.2    Not otherwise to alter the Demised Premises or to carry out
         alterations or additions to the Supplies without the prior written
         approval of and in accordance with drawings and specifications
         approved by the Landlord (such approvals not be to unreasonably
         withheld or delayed). No approvals shall be required for (but
         written notice shall be given to the Landlord of) the installation
         and removal of demountable partitioning provided that they do not
         interfere with the provision of the Services.

4.9.3    If a breach of sub-clause 4.9.1 or 4.9.2 occurs the Landlord may
         (without obligation) at the Tenant's expense remove or fill up (as
         the case may be) any unauthorised buildings, structures, alterations
         or additions.



                                      6


<PAGE>


4.9.4    The terms of any approval may require the Tenant to covenant in such
         form as the Landlord shall reasonably require in regard to the
         execution of any works to the Demised Premises and as the Landlord
         may absolutely require their reinstatement at the Termination Date.

4.10   SIGNS AND ADVERTISEMENTS

       Not to display on or from the Demised Premises so as to be visible
       from the outside any sign, advertisement, lettering or notice of any
       kind except as previously approved by the Landlord subject always to
       the provisions of paragraphs 5 and 6 of Part II of the First Schedule.

4.11   OVERLOADING

       Not to exceed the designed floor loading of the Building.

4.12   USER

       Not to use the Demised Premises otherwise than as high class offices.

4.13   RESTRICTIONS ON USER

       Not to:

4.13.1   use the address of the Demised Premises (whether for advertising
         purposes or otherwise) in a manner which the Landlord acting
         reasonably considers detrimental to the reputation of the Building;

4.13.2   install any window box or receptacle for flowers outside the Demised
         Premises;

4.13.3   cook or heat food on the Demised Premises other than by microwaving
         pre-cooked food;

4.13.4   do anything which may invalidate any insurance or render any
         additional premium payable for the insurance of the Demised Premises
         or the Building against any Insured Risk;

4.13.5   use the Demised Premises as a dwelling place or for sleeping, as a
         betting office or in connection with gaming, for the sale of
         intoxicants for consumption on or off the premises, for public
         entertainment, or for any sale by auction (which for the avoidance
         of doubt not prohibit the use of the Demised Premises for the
         purposes of the Tenant's business as an e-commerce company); or

4.13.6   use the Demised Premises for any illegal or immoral purpose or cause
         in the opinion of the Landlord any nuisance, damage or disturbance
         to the Landlord or the occupiers of the Building.



                                      7


<PAGE>


4.14   ALIENATION

4.14.1   In this sub-clause:

      "PERMITTED PART"

              shall mean the whole or a part of any floor of the Demised
              Premises (excluding the landings lifts toilets and services
              ducts) together with (in common with other occupiers) the right
              to use the entrances staircases lifts and landings for access
              thereto and egress therefrom and the right to use appropriate
              toilet accommodation so that a Permitted Part comprises a viable
              independent suite of offices.

      "PERMISSIBLE UNDERLEASE"

              means an underlease created by Deed, not created on payment of
              a fine or premium, and containing the Stipulated Covenants; and
              a reservation of and an underlessee's covenant to pay a rent not
              less than the open market rent (obtainable without making a fine
              or premium) for the Demised Premises or any Permitted Part; and
              provisions for rent review at the same times and in the same
              terms as in the Second Schedule of this Lease; and provisions for
              change of use, alienation and recovery of insurance premium and
              service charge no less onerous those in this Lease.

      "PERMISSIBLE UNDERLESSEE"

              means a person who has executed a Deed giving the Stipulated
              Covenants directly to the Landlord;

      "STIPULATED COVENANTS"

              means the Tenant's covenants and conditions in this Lease
              (except the Tenant's covenant to pay the rents reserved by this
              Lease) to the extent applicable to the premises to be underlet.

4.14.2   Not (save as herein expressly permitted) to assign, share, part with
         the possession or occupation of, charge or underlet any part of the
         Demised Premises.

4.14.3   Not to underlet the whole of the Demised Premises or a Permitted
         Part except to a Permissible Underlessee by a Permissible Underlease
         in accordance with the provisions of clause 4.14.5.

4.14.4   Not to part with, or share the possession or occupation of the
         Demised Premises except by virtue of an assignment or underlease
         authorised under this sub-clause 4.14.

4.14.5   Not without the prior consent in writing of the Landlord (such
         consent not to be unreasonably withheld or delayed subject in the
         case of an assignment to sub-clauses 4.14.6 - 4.14.9):

         (a)  to assign the whole of the Demised Premises; or

         (b)  to underlet (including in any derivative manner) the whole of
              the Demised Premises by a Permissible Underlease to a
              Permissible Underlessee; or



                                      8


<PAGE>


         (c)  to charge or mortgage in any way the whole (except by a
              floating charge upon the Tenant's undertaking) of the
              Demised Premises.

         (d)  to underlet a Permitted Part except by a Permissible Underlease
              for a term not exceeding two years and which shall exclude by
              Court Order Sections 24-28 (inclusive) of the Landlord and
              Tenant Act 1954 and not at any time during the term to grant
              or permit to be granted Permissible Underleases of Permitted
              Parts so that there are more than two occupiers of any floor of
              the Demised Premises at any one time provided that whilst this
              lease is vested in eToys UK Limited (but not otherwise) the
              Tenant may grant or permit to be granted Permissable Underleases
              of Permitted Parts for a term not exceeding two years so that
              there may be up to five occupiers of any floor of the Demised
              Premises at any one time.


4.14.6   A refusal of consent to assign will be reasonable if on the ground
         (whether or not with other grounds) that in the reasonable opinion
         of the Landlord the proposed assignee is unlikely to be able to meet
         its obligations under this Lease having regard to all relevant
         circumstances.

4.14.7   Sub-clause 4.14.5 shall be without prejudice to the right of the
         Landlord to refuse consent on any other ground or grounds where such
         refusal would be reasonable provided always that it shall not be
         reasonable for the Landlord to request more than one form of
         guarantee from the proposed assignee and to refuse consent on the
         grounds that the proposed assignee shall not provide more than one
         form of guarantee.

4.14.8   It will be reasonable for any consent to assign to be subject to a
         condition that the assigning Tenant execute as a deed and in a form
         reasonably required by the Landlord and deliver to the Landlord prior
         to the assignment in question an authorised guarantee agreement (as
         defined in and for the purposes of section 16 of the Landlord and
         Tenant (Covenants) Act 1995).

4.14.9   Sub-clause 4.14.8 shall be without prejudice to the right of the
         Landlord to impose further conditions upon a grant of consent where
         such imposition would be reasonable (subject at all times to the
         provisions of clause 4.14.7).

4.14.10  Not to waive any breach by any underlessee of any of the Stipulated
         Covenants, but on any such breach to take all reasonable steps to
         enforce the Stipulated Covenants by re-entry or otherwise.

4.14.11  The Tenant may (without prejudice to clause 4.14.4) without the
         necessity of obtaining any consent of the Landlord share occupation
         of the whole or any part or parts of the Demised Premises with a
         company that is a member of the same group as the Tenant (as defined
         by Section 42 of the Landlord and Tenant Act 1954) provided that:

         (a)  The Landlord shall be notified of the commencement or
              termination of each such arrangement;

         (b)  such arrangement shall cease forthwith upon any such company or
              companies ceasing to be a members of members of the same group
              as the tenant;



                                      9


<PAGE>


         (c)  no relationship of Landlord and Tenant is thereby created.

4.15   REGISTRATION

       To produce two certified copies of every document evidencing any
       transmission of any interest (however remote) in the Demised Premises
       to the Landlord's Solicitors for registration within one month after
       the date of such document, and to pay to the Landlord's Solicitors a
       fee of Twenty Five Pounds plus Value Added Tax for each such
       registration together with any fee properly payable to any Superior
       Landlord.

4.16   TO PERMIT VIEWING

       To permit prospective purchasers of the reversion or persons carrying
       out a valuation for insurance purposes (once in any year of the Term)
       with written authority from the Landlord or its agent at reasonable
       times in the day and upon reasonable prior notice to view the Demised
       Premises.

4.17   TO INFORM THE LANDLORD OF NOTICES

       To give immediate notice to the Landlord upon becoming aware of any
       notice or claim affecting the Demised Premises.

4.18   REIMBURSE FEES INCURRED BY LANDLORD

       To reimburse the Landlord on written demand all expenditure properly
       incurred in connection with:

4.18.1   any breach of any Tenant's covenant in this Lease, including the
         preparation and service of a notice under section 146 of the Law of
         Property Act 1925; and

4.18.2   the preparation and service of a Schedule of Dilapidations.

4.19   THE PLANNING ACTS

4.19.1   In this sub-clause:

      "THE PLANNING ACTS"

                 means every Act for the time being in force relating to the
                 use, development and occupation of land and buildings; and

      "PLANNING PERMISSION"

                 means any permission, consent or approval given under the
                 Planning Acts.

4.19.2   To comply with the requirements of the Planning Acts and of all
         Planning Permissions relating to or affecting the Demised Premises.

4.19.3   Not to apply for or implement any Planning Permission without (in
         each case) the prior written consent of the Landlord (such approval
         not to be unreasonably withheld or delayed where the Landlord has
         already consented to the alterations in accordance with this Lease
         and Planning Permission would be required for any such alterations).



                                      10


<PAGE>

4.20      ENCROACHMENT AND EASEMENTS

          Not to obstruct any windows belonging to the Demised Premises or the
          Building nor to permit any encroachment or easement to be made or
          threatened against the Demised Premises.

4.21      INDEMNITY

          To indemnify the Landlord from all losses, actions, claims, demands,
          costs, damages and expenses.

4.21.1         in respect of any personal injury or death or damage to any
               property or any infringement of any right or otherwise arising
               directly or indirectly in respect of the Demised Premises or
               their use; and

4.21.2         arising out of any breach of any obligation owed by the Tenant
               under this Lease.

4.22      TO PAY CHARGES

          To pay the reasonable charges (including Solicitor's and Surveyor's
          charges) and disbursements properly incurred by the Landlord in
          connection with any application by the Tenant for consent under any
          provision of this Lease where such application is withdrawn or consent
          is granted or lawfully refused.

4.23      INTEREST ON OVERDUE PAYMENTS

          To pay to the Landlord interest on all sums payable under this Lease
          not paid within 21 days following the due date (or if no date is
          specified from the date of demand) at the rate of three pounds per
          cent per annum above Lloyds TSB Bank Plc Base Lending Rate for the
          time being in force from the due date (or if no date is specified from
          the date of demand) until payment.

4.24      VAT

          Any payment or other consideration to be provided to the Landlord
          pursuant to the provisions of this Lease is exclusive of VAT and the
          Tenant shall in addition pay:

4.24.1         VAT properly payable on any consideration in respect of a VAT
               Supply to the Tenant by the Landlord; and

4.24.2         a fair proportion of the VAT properly charged in respect of any
               VAT Supply to the Landlord in respect of the Demised Premises or
               the Building where such VAT is not recovered by the Landlord from
               HM Customs & Excise.

4.25      MANAGEMENT: COMMON PARTS

4.25.1         Not to transport heavy or bulky items through the Common Parts
               between 9.00 a.m. and 6.00 p.m. unless the consent of the
               Landlord (such consent not to be unreasonably withheld or
               delayed) has been obtained.

4.25.2         Not to damage or mark any surface of the Common Parts by using
               unsuitable trolleys, or otherwise, or overload any lift or raised
               floor (if any).


                                       11
<PAGE>


4.25.3         Not to obstruct, deposit goods or rubbish upon, cause any
               nuisance or disturbance on, or endanger any person or vehicle
               using any of the Common Parts.

4.25.4         To comply with reasonable regulations notified by the Landlord to
               the Tenant as to the use of the Common Parts.

4.26      SUPERIOR INTERESTS

          To comply with all tenant's covenants (except as to payment of rents
          or other sums) relating to the Demised Premises and contained or
          referred to in any lease to which this Lease is inferior and with all
          covenants affecting the freehold interest in the Demised Premises.

5.   LANDLORD'S COVENANTS

     THE Landlord COVENANTS with the Tenant as follows:

5.1       QUIET ENJOYMENT

          That so long as the Tenant pays the rents reserved by and complies
          with the Tenant's covenants and conditions in this Lease, the Tenant
          shall peaceably hold and enjoy the Demised Premises during the Term
          without any lawful interruption by the Landlord or any person
          rightfully claiming under or in trust for it.

5.2       TO INSURE

5.2.1          To maintain a well established insurance office (to be notified
               to the Tenant) insurance of the Building against the Insured
               Risks in their full reinstatement value (including all
               professional fees and incidental expenses) and three years rents
               firstly and thirdly reserved by this Lease subject to such
               excesses, limitations and exclusions as the insurers may impose
               and shall have been notified in writing to the Tenant and
               otherwise on the usual terms of such insurance office.

5.2.2          If any part of the Building is destroyed or damaged by an
               Insurance Risk then unless payment of the insurance moneys is
               refused in whole or part because of the act or default of the
               Tenant and subject to obtaining all necessary planning and other
               consents, to expend all moneys received (other than in respect of
               loss of rent) from such insurance towards reinstating as quickly
               as reasonably practicable the Building following destruction or
               damage by an Insured Risk.

5.3       TO PROVIDE SERVICES

          To supply the Services in accordance with Part II of the Third
          Schedule.

5.4       SIGNAGE

          On request to display the name and business of the Tenant in the
          Landlord's house style on any signboards in the Common Parts.


                                       12


<PAGE>


5.5      HEADLEASE

         To pay the rents reserved by the headlease under which the Landlord
         holds the Building and to observe and perform the Tenant's covenants
         under the headlease unless the obligation to do so falls upon the
         Tenant by virtue of this Lease.

6.  AGREEMENTS

    IT IS AGREED that:

6.1      RE-ENTRY

6.1.1         If any event specified in sub-clause 6.1.2 occurs the Landlord
              may at any time afterwards re-enter the Demised Premises or any
              part of them in the name of the whole and this Lease will then
              immediately determine. In sub-clause 6.1.2 reference to "the
              1986 Act" means the Insolvency Act 1986.

6.1.2         The events referred to in clause 6.1.1 are as follows:

              (a) any rent reserved remaining unpaid for 21 days after
                  becoming due and payable: and in the case of the rent first
                  reserved this means whether formally demanded or not;

              (b) the Tenant failing to comply with any obligation which it
                  has undertaken or any condition to which it is bound under
                  this Lease;

              (c) the Tenant (if a company) entering into liquidation or
                  passing a resolution for winding-up (otherwise than a
                  voluntary winding-up of a solvent company for the purpose
                  of amalgamation or reconstruction previously consented to
                  by the Landlord such consent not to be unreasonably
                  withheld or delayed) or being unable to pay its debts
                  within the meaning of sections 122 and 123 of the 1986 Act
                  or summoning a meeting of its creditors or any of them under
                  Part I of the 1986 Act or allowing a petition for an
                  Administration Order in respect of it to be filed in court
                  or a receiver or an administrative receiver for it being
                  appointed;

              (d) the Tenant (if an individual) having a receiving order made
                  against him or becoming bankrupt or entering into a
                  composition with his creditors or being unable to pay or
                  having no reasonable prospect of being able to pay his
                  debts within the meaning of sections 267 and 268 of the
                  1896 Act or an interim order being made against him under
                  Part VIII of the 1986 Act.

6.1.3         Neither the existence of the Landlord's right under sub-clause
              6.1.1 above nor the consequences of any exercise of that right
              are to affect any other right or remedy available to the Landlord.

6.2      CESSER OF RENT

         If the Demised Premises are destroyed or damaged by any Insured Risk
         so as to be unfit for occupation and use the insurance effected by
         the Landlord has not been vitiated or payment of the policy moneys
         refused in whole or in part because of any act or default of or
         suffered by the Tenant, then the rents first and third reserved, or
         a fair


                                      13

<PAGE>

         proportion of those rents according to the nature and extent of the
         damage, shall cease to be payable until the Demised Premises shall
         again be fit for occupation and use or until the expiration of three
         years from the date the destruction or damage occurred (whichever
         period shall be the shorter).

6.3      NO EASEMENTS

         The Tenant shall not be entitled to any rights whether of light and
         air or otherwise (save as expressly granted by this Lease) which
         would restrict the free user for building or otherwise of the
         Building or any adjoining or neighbouring premises. Section 62 Law
         of Property Act 1925 will not apply to this Lease.

6.4      SERVICE OF NOTICES

         In addition to any other prescribed mode of service any notices
         shall be validly served if served in accordance with section 196 of
         the Law of Property Act 1925 as amended by the Recorded Delivery
         Service Act 1962 or, in the case of the Tenant, if left addressed to
         it on the Demised Premises or sent to it by post.

6.5      SUPERIOR LANDLORD'S AND MORTGAGEE'S CONSENT

         The giving of any Landlord's consent or approval required under the
         terms of this Lease shall be conditional upon the consent or
         approval (where required) of any Superior Landlords or Mortgagees.
         The Landlord will apply for such consent or approval at the expense
         of the Tenant.

6.6      TENANT'S OPTION TO DETERMINE

         The Tenant may determine this Lease by giving to the Landlord not
         less than twelve months' previous notice in writing to expire on the
         25 December 2009. On the expiration of such notice and upon payment
         by the Tenant to the Landlord of a sum equivalent to six months rent
         firstly reserved by this Lease at such date and upon the Tenant
         giving vacant possession this Lease shall cease and determine, but
         without prejudice to any claim in respect of any prior breach.

6.7      CONTRACTS (RIGHTS OF THIRD PARTIES) ACT 1999

         Unless it is expressly stated that the Contracts (Rights of Third
         Parties) Act 1999 is to apply nothing in this Lease will create
         rights in favour of any one other than the parties to this Lease.

IN WITNESS the parties have executed this Lease as a deed the day and year
first before written.


                                      14
<PAGE>

                              THE FIRST SCHEDULE

                                   PART I

                       Description of Demised Premises

<TABLE>
<S> <C>

1.  ALL THOSE Sixth and Seventh Floors of the Building shown for the purposes
    of identification only coloured pink on the Plans and more particularly
    described in paragraphs 2 and 3 below.

2.  There is included in this demise:

2.1       all internal surfacing materials and finishes on the walls, floors
          and ceilings of the Demised Premises and on the other structural
          parts of the Building within or bounding the Demised Premises; and

2.2       all doors (including those giving access to the Demised Premises
          from the Common Parts), windows and skylights (and in each case
          their frames and glazing) of the Demised Premises; and

2.3       all Landlord's plant, fixtures and fittings (save as specified in
          PARAGRAPH 3.4 below); and

2.4       one half severed vertically of any non-structural walls separating
          the Demised Premises from any adjoining premises; and

2.5       the entirety of any non-structural walls wholly within the Demised
          Premises or bounding the same (other than as specified in PARAGRAPH
          2.4 above); and

2.6       all Conducting Media within and exclusively serving the Demised
          Premises (save as specified in PARAGRAPH 3.4 below);

2.7       the suspended ceiling, the raised floor (and the supports for each
          of these) and the airspace between each of these and the slab or
          other structural part respectively above and below them; and

2.8       window blinds (if any) and equipment for operating the same.

3.   There is excluded from this demise:

3.1       the whole of the airspace above the Demised Premises;

3.2       all loadbearing and exterior walls and the floors and ceilings of
          the Demised Premises (other than to the extent expressly included
          by virtue of PARAGRAPH 2 above);

3.3       all structural parts of the Building;

3.4       any conducting media serving the remainder of the Building.

</TABLE>

                                       15

<PAGE>

                                    PART II

                          Easements and Rights Granted

1.   The right of subjacent and lateral support for the Demised Premises from
     the remainder of the Building.

2.   The free passage of Supplies from and to the Demised Premises through
     Conducting Media at the Building.

3.   The right of access to and exit from the Demised Premises through the
     relevant Common Parts within the Building at all times.

4.   The right of use of lavatory accommodation where provided for common use
     in the Building.

5.   The right to display the Tenant's name upon the nameboards at both
     Haymarket and St Alban's Street reception areas at the Building.

6.   The right with the Landlord's consent (such consent not to be unreasonably
     withheld with regard to design and layout) to display the Tenant's name
     in the lobby areas outside each of the floors in the Building comprising
     the Demised Premises.


                                   PART III

                         Easements and Rights Reserved

1.   SUPPORT

     The right to subjacent and lateral support for the remainder of the
     Building from the Demised Premises.

2.   RUNNING OF SERVICES

     The free passage of Supplies from and to the remainder of the Building
     through Conducting Media at any time within the Demised Premises.

3.   ENTRY IN RESPECT OF SERVICES ETC.

     The right to install, clean, maintain, alter, make connections to,
     replace or repair any Conducting Media within the Demised Premises but
     serving the Building and the right to enter the Demised Premises for
     those purposes.

4.   ENTRY FOR MANAGEMENT PURPOSES

     The right to enter on the Demised Premises to inspect, repair, alter,
     decorate or execute any other works upon the Building which would
     otherwise not be practicable to carry out, or to carry out any Services
     or for any other reasonable management purpose.

                                       16
<PAGE>

5.  ESCAPE

    The right of emergency escape over any parts of the Demised Premises as
    are designated for such purpose.

6.  SUPERIOR INTERESTS

    All exceptions and reservations out of any lease to which this Lease is
    inferior, or out of the freehold interest in the Demised Premises.

7.  COMMON PARTS: REDEVELOPMENT

    Causing as little inconvenience interruption or nuisance to the Tenant as
    possible:

7.1      the right, in emergency or when works are being carried out to them,
         to close off or divert any of the Common Parts provided that such
         closing off or diversion is ceased as soon as reasonably possible;

7.2      the right to stop up or divert any Conducting Media or other Common
         Parts subject to a reasonable alternative being made available; and

7.3      The right to build upon, alter, add to or redevelop the Building or
         any adjoining or neighbouring premises as the Landlord considers
         fit, whether or not the access of light and air to the Demised
         Premises is interfered with.


                                      17

<PAGE>

                             THE SECOND SCHEDULE

                                 Rent Review
1.  In this Schedule:

1.1      The rent review dates shall be the 25 December in the years 2004 and
         2009 and the expression "THE RELEVANT RENT REVIEW DATE" shall be
         construed accordingly.

1.2      The open market rent shall be the yearly rent for which the Demised
         Premises might reasonably expect to be let on the open market, with
         vacant possession, on the relevant rent review date, by a willing
         lessor to a willing lessee, without taking a fine or premium, for a
         term of 10 years commencing on the relevant rent review date, upon
         the supposition that the willing lessee shall have been given prior
         to (and that there shall have expired prior to) the relevant rent
         review date a sufficient rent free period for the purposes of the
         carrying out of lessee's fitting out works and on the assumption if
         not a fact that the Tenant has complied with its obligations under
         this Lease, that no work has been carried out to the Demised Premises
         which has reduced the rental value of the Demised Premises, if the
         whole or any part of the Demised Premises or the Building has been
         destroyed or damaged it has been reinstated and the Landlord shall
         have paid the contribution of L25 per square metre plus VAT towards
         the cost of providing and installing throughout the office areas of
         the seventh floor of the Demised Premises quality carpeting and the
         contribution of L70 per floor box towards the cost of the provision
         of floor boxes and tracking and distributed under floor power and
         floor grommets upon all the office areas of the Demised Premises and
         that at the relevant rent review date all the above exist and remain
         in good repair condition and working order and otherwise upon the
         terms and conditions (save as to the amount of rent payable but
         including provisions for rent review every five years and otherwise
         on terms similar to those contained in this Second Schedule)
         contained in this Lease, there being disregarded:

1.2.1         any effect on rent of the Tenant having been in occupation of
              the Demised Premises; and

1.2.2         any goodwill accruing to the Demised Premises because of the
              business of the Tenant;

1.2.3         any effect on rent of any improvement carried out by the Tenant
              otherwise than in pursuance of an obligation to the Landlord;
              and

1.2.4         any effect upon rent of any rental concession or abatement
              contained in this Lease.

2.       The rent payable under this Lease with effect from each rent review
         date shall be the higher of:

2.1         the rent reserved by this Lease immediately before the relevant
            rent review date (disregarding any cesser under CLAUSE 6.2); and

2.2         the open market rent on the relevant rent review date.


                                      18

<PAGE>


3.   The open market rent at the relevant rent review date shall be determined
     by agreement between the Landlord and the Tenant. Either such party may
     require the other to commence and carry out negotiations as to the open
     market rent at any time after the date six months before the relevant rent
     review date.

4.   If the parties are unable to agree the open market rent it shall be
     determined by an expert who may be agreed upon in writing by the Landlord
     and the Tenant. Failing agreement, he shall be appointed upon the
     application of either party by the President (or next most senior available
     officer) of the Royal Institution of Chartered Surveyors.

5.   The expert's determination (which shall include payment of his costs) shall
     be final and binding on the parties.

6.   If on the relevant rent review date the open market rent has not be
     ascertained, the yearly rent reserved by this Lease immediately before the
     relevant rent review date shall continue to be payable until ascertainment.
     Immediately after ascertainment the difference (if any) between the amount
     actually so paid and the amount which would have been payable had it been
     ascertained before the relevant rent review date, together with interest
     on that difference calculated on a daily basis on each instalment from the
     date on which such instalment would have become payable to the date of
     payment, at Lloyds TSB Bank PLC base lending rate for the time being in
     force, shall be paid by the Tenant to the Landlord. If not so paid such
     sums shall be recoverable as rent in arrear.

7.   A deed recording the rent on review shall forthwith be entered into in such
     form as the Landlord shall reasonably require.



                                       19
<PAGE>


                               THE THIRD SCHEDULE

                          Services and Service Charges

                                     PART I

                           Administrative Provisions


1.   The accounting period shall be the year or other period ending on each
     Thirty first day of March or otherwise as stipulated by the Landlord.

2.   As soon as reasonably practicable after the end of each accounting period
     the Landlord will supply the Tenant with a statement (which save for any
     manifest error shall be binding on the parties) of the expenditure properly
     incurred by the Landlord in respect of the Services, and of the Service
     Charge payable for that accounting period.

3.   Pending the ascertainment of the Service Charge for each accounting period
     the Tenant shall pay, by equal quarterly payments on the four usual quarter
     days, a provisional sum by way of Service Charge of L57,000 per annum.

4.   When the actual Service Charge for each accounting period has been
     ascertained any surplus Service Charge due from or paid by the Tenant shall
     be added to or subtracted from (as the case may be) the next payment or
     payments to be made by the Tenant under PARAGRAPH 3, except that an amount
     owing at the Termination Date shall be paid or repaid as the case may be
     within three months of the Termination Date.

5.   The occurrence of the Termination Date shall not prejudice the Tenant's
     obligation to pay or the Landlord's entitlement to recover Service Charge
     upon demand made after the Termination Date where these have not been
     quantified prior to the Termination Date.

                                    PART II

                             Landlord's Obligations

In accordance with the principles of good estate management the Landlord will
supply the Services in an efficient and economical manner. The Landlord (acting
reasonably and properly at all times):

1.   may employ agents, contractors or others as from time to time it thinks
     fit; and

2.   shall not be responsible for any temporary delay or stoppage in the supply
     of the Services due to any circumstances outside the Landlord's control,
     but shall take all reasonable steps to restore the supply as soon as
     practicable.


                                       20


<PAGE>

                                   PART III

                                   Services

1.        Repairing, renewing, rebuilding, replacing, decorating, cleaning,
          emptying, lighting and repainting the foundations roof structure
          and exterior of the Building and all Common Parts and Conducting
          Media used in common by the Tenant and others.

2.        Rates (if any) and other levies on and insurance of the Common
          Parts and/or on the Building generally and Property Owner's and
          Employer's Insurance on the Building; metered water supply to the
          Building, and power supply (metered or otherwise) to the Demised
          Premises.

3.        Providing, inspecting, maintaining (including by maintenance
          contracts), repairing, renewing, replacing, upgrading, insuring and
          operating all plant machinery, apparatus and vehicles used in
          providing the Services and all signage in the Common Parts.

4.        Provision, maintenance, renewal and replacement of all
          fire-fighting and fire detection equipment, fire alarm systems,
          security systems in the Building.

5.1       Heating the Building (except the Common Parts) during normal
          working hours during the months of October until April (inclusive)
          including heating the Demised Premises, to a temperature of
          65DEG. F (provided the external temperature in the shade is at least
          32DEG. F and the doors and windows of the Demised Premises are kept
          closed).

5.2       Heating the Common Parts when necessary.

5.3       Supplying comfort cooling to the Demised Premises during normal
          working hours.

5.4       Supplying warm and cold water to and otherwise equipping and
          supplying any toilet accommodation.

6.        Employment of all staff (including remuneration, incidental
          benefits and all associated costs and overheads) and contractors
          and professionals for the management and security of the Building
          and otherwise in connection with the Services.

7.        Providing accommodation for staff, plant and equipment and all
          outgoings on such accommodation.

8.        The execution of all works and the provision and maintenance of all
          facilities which are required under any Act to be carried out or
          provided at the Building generally.

9.        Any further services provided at any time by the Landlord for
          maintaining and securing the amenities of the Building.

10.       Any audit fee.

11.       Management charges meaning either:

11.1      the fees and expenses reasonably and properly charged by the
          Landlord's agents; or


                                      21
<PAGE>

11.2      if the work is carried out by the Landlord's own staff then 10% of
          the sum of:

11.2.1    the aggregate cost of all the above items, and

11.2.2    any irrecoverable VAT on that aggregate cost


                                    ( THE COMMON SEAL of
                                    ( LAND SECURITIES PLC
                                    ( was hereunto affected in the presence of:
[SEAL]
                                    Director   /S/ [ILLEGIBLE]

                                    Director/Secretary   /S/ [ILLEGIBLE]


                                      22